UK 10-year gilt yields fell to 4.71%, near two-month lows, as bond markets remained calm while investors awaited news on the new Treasury leader to replace Rachel Reeves. Markets looked past immediate fiscal concerns tied to a likely Andy Burnham premiership, with the new Chancellor’s identity expected to shape fiscal and economic policies. Burnham, the sole candidate to succeed Keir Starmer, pledged on Monday to significantly devolve fiscal powers from Westminster to local authorities if elected, while upholding fiscal discipline. Gilt yields were on track for a 9bps monthly decline and a 14bps quarterly drop as investors assessed the impact of the interim US-Iran peace deal and shifting interest rate expectations in both the UK and US. The reopening of the Strait of Hormuz has reduced oil prices and inflation concerns, lowering bets on Bank of England rate hikes, while the US Federal Reserve’s hawkish stance continues to support expectations of US rate increases.